Twelve Truths My Economist Never Told Me

~SMS~
1. Markets are rational—except when more frequently, they are not.

2. Moral hazard is to leverage your leverage.

3. There are stock puffers & stock prickers—and therein lies the grub.

4. Efficient Market Hypothesis is a congenital myth—somewhat like Santa Claus.^[1]

5. Oversupply and under-demand are the norm—except when less frequently, they are not.

6. Losing someone else’s money is less stressful than losing your own (aka: your Broker’s Credo).

7. There is ONLY ONE THING more tempting than a large, quick profit.^[2]

8. The “long shots of short-term” kill the goose & gander exponentially more often than the farm manager.

9. The daily SPANDEX comprises the rationale and ratings of money and market fluctuations elucidated by the former yet current Mr. Greenspan, and like-minders (herein dubbed spandexers).

10. Hedge funds are strongly regulated by temptation.

11. Insider-trading is a branch (perhaps a limb) of Quantum Mechanics. “It’s what happens when no one is looking” (or just as effective, when someone is looking the other way).^[3]

12. A self-regulating market is a “wild speculative paradox,”^[4] if proof is in the pudding (or lack thereof).^[5]

Freebie 13.^[6] It has been speculated that “broker” is derivative from the verb “to break.”

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[1] Santa Claus (sometimes pronounced Claws)—a fiction that receives highly-marketed credit for things this Mister Claus neither made nor paid for.
[2] No one yet knows what it is.
[3] Further out on that same limb someone would invariably find tax fraud—if someone were looking.
[4] Attributed to Alexander Hamilton, man on the US10$bill.
[5] Perhaps more accurately, the proof is in the déjà vu of markets and mania.
[6] As in a baker’s dozen.